Being Adaptable as a Commercial Real Estate Agent Wins More Business

In commercial real estate agency, you should be adaptable to the challenges of the property market today, and the requirements of the client.  This is really easy to do when you are a specialist in a property type and a location.

As a specialist in a property type and location you will or should understand the factors of pricing, rentals, tenancy mix, time on market, marketing, and negotiation.  You are the specialist that can take over the clients property challenge and turn it into a successful property outcome.  Specialization is the key to the process.

The clients that we work for require the right information and strategically relevant skills on the part of their agent.  If you pitch and present your services correctly, your conversion to an exclusive listing will be quite easy.

Those agents today with an abundance of ‘open’ listings are those agents that have not sufficiently branded themselves as experts in the local area.  They have no real point of difference when it comes to pitching their services.  The clients they work with can see no real benefit in exclusive listing with a particular agent.  If you want more exclusive listings, you will need to solve that perception.  I go back to the point that specialization as a property agent is essential to the process.  Top agents win more exclusive listings and that is the rule not the exception.

To be adaptable as a specialist real estate agent means that you have the necessary skills and the information required to handle the following situations comfortably:

  1. A client requires a vacancy in a property to be leased efficiently and effectively.  The tenancy may have been vacant for some time.  The client therefore requires innovative solutions that apply to the leasing process.  They need that vacancy filled as soon as possible.
  2. A vacant property requires repositioning in the market so that it may be sold or leased.  The pressures of the prevailing market conditions and the zoning requirements set the guidelines for the target market and the efforts that you need to undertake.
  3. At commercial or retail property has reached the end of its economic life given its current and present usage.  On that basis the property needs to be subjected to a material change of use and redevelopment.  As part of that process you will need to consider the approvals and strategies behind local planning and development.
  4. The client’s property may be under-performing from an income perspective.  You should know how to review the tenancy mix, lease profiles, rental strategies, lease documentation, and outgoings recoveries.  On that basis you will soon see the discrepancies when it comes to income recovery and growth.  You can add to this assessment the rules and legalities that apply to rent review negotiations, lease option negotiations, tenancy relocations, and redevelopment alternatives.
  5. The client’s property today may be a future sales opportunity.  In leading to that sales situation, they may have challenges that apply to the tenancy mix and the income profile.  Over time you can help them with income modification and capital growth.

You can look at a property from a number of different perspectives.  It may be vacant, unimproved, leased, or vacant.  The value for the property can also be determined in a number of ways based on the identified potential and the prevailing market conditions.  To assess the value of the property, you can cross reference two or three methods of valuation or appraisal to see what will work when it comes to any future listing price and marketing opportunity.

The top agents in a commercial real estate agency today are very adaptable.  They understand how to move across the requirements and changes of the market.  They know how to match the client and their property to the prevailing market conditions.  You can do the same.  Get to know your market and how it is changing and growing.

How to Take Tenant Enquiries in Commercial Real Estate Agency Today

Leasing commercial real estate is something that can provide a good buffer of commission when sales listings and actual sales have slowed.  It is also the case that a successful lease transaction can lead to a future property management or sales opportunity.  This then says that all top commercial real estate agents should be prepared to lease ‘quality’ local property.

Notice that I said the word ‘quality’ when it comes to property selection.  Determine the property size and type that will give you the appropriate fee for a successful lease transaction.  Focus locally on quality, the good landlords, and the quality tenants.  A lease transaction can take a reasonable amount of time to initiate and complete.  On that basis you should only focus on the good deals and the good opportunities.  Let some other agent have the small things to lease that have minimal fee results.

Here are some tips for taking enquiries from tenants today when it comes to leasing new premises or relocating:

  1. Make sure that you’re talking to the decision maker when it comes to the particular tenant.  Get the contact details and the identity of the tenant sorted before you provide too much property information.
  2. Ask them about the property type that they are looking for when it comes to improvements, services and amenities, location, and permitted use.  Also find out about the required lease term, the rental budget, and property usage.
  3. The tenant’s staff and the customers interacting on the property will create certain challenges when it comes to improvements and location.  Car parking is a good example and case in point.
  4. There are big differences when it comes to leasing office, industrial, and retail property.  Create checklists for each so you can ask the relevant questions with potential tenants.
  5. Is the tenant coming to you today from another property location?  Are they new to leasing property locally?  If they know nothing about the local area, you will need to fill in the gaps when it comes to business demographics, transport, communication, local area profile, and property usage.
  6. If they are coming to you from another property location, they may have some timeframe to satisfy or a property disposal requirement.  Ask the right questions to get the complete picture.  You may even find another listing requirement with the property changeover.
  7. Has the tenant looked at other listings with other local property agents?  It is quite likely that they have seen other listings and may have current negotiations underway through other agents.  It is good to know if this is the case so you can adjust your strategy accordingly.

Don’t be too eager to take a tenant to a property.  Get all of the facts together prior to the inspection process so that you don’t waste your time with the incorrect strategies or listings.  Match the tenant to the property before you leave the office; qualify them.  If necessary take them to a number of properties to give them a comparison of current market conditions.

Get more tips like this in our Newsletter.

Avoid Dangerous Clients in Commercial Real Estate Agency

Are there dangerous clients in commercial real estate?  Absolutely; yes is the answer.  You will come across them all the time.  You must protect yourself from these clients that are out to manipulate the deal for themselves without true transparency.

Ethics in our industry is really important.  Poor quality clients can derail your listing integrity and commissions.  So the message is that you should keep to the rules in the industry that protect your actions and listing activities.  Clients that are less than honest can destroy your business in many different ways.

So here are some signs to look for when it comes to client selection and communication:

  1. Watch out for the clients that will not sign an agency appointment ‘until you find a buyer or tenant’.  The request happens all the time in our industry but you cannot and should not act outside of the laws of commercial real estate agency in your location.  You are bound to act legally and with integrity; if the client wants you to ‘bend the rules’, they are not a client to have and you simply cannot trust them.  In those circumstances walk away from the deal or the listing.   Let some other agent waste their own time and risk legal action.  It is not fun when legal claims are made against you.
  2. Some clients work with many agents.  Now this is just fine if all relationships are ethical and legal, but your listing and negotiation information should be protected by a valid appointment to act and an established client and agent relationship.  If you suspect that the client is sharing your ‘market intelligence’ with other agents, you could have a problem.
  3. If your client avoids giving you an exclusive listing, it can be a sign that you really do not have their commitment and trust.  They could also be working with many other agents at this very moment in trying to sell or lease the property.  Ask the questions and get to the real facts of the matter.
  4. A reluctance to give you full access to the property or comprehensive property detail is a sign that something is going on.  A similar problem is evident with the client not disclosing tenant and income detail for the property.  If the client is not being open and honest, step back from the deal until you know all the facts.  Get copy of all current property related documentation before you go to the market, negotiate, or talk to other people.  Understand the facts that are before you.
  5. Failing to put things in writing can be a big problem in our industry.  Many conversations across the telephone happen every day.  Always keep your notes of client and customer conversations and instructions.  Evidence the matter back to the other party in an email or similar written or electronic form.

Lastly something should be said regards confidentiality.  Know who your client is and what their instructions are.  Keep client agent discussions and instructions confidential.  Disclosure of privileged information can get you into a lot of trouble.

Time Management in Commercial Real Estate Agency Today

In commercial real estate agency it is very much the case that the day will take over your diary unless you take control.  People will impose on your time and things then will go absolutely nowhere.

If you are like me, you will hate people wasting your time.  In our industry time is money and we need to remember that.  In an average day lots of people will want a slice of your time.  How about this list for starters?

  • Existing clients with their listings
  • New clients wanting to list their property
  • Team leaders wanting to talk about the weeks results
  • The boss (for all sorts of reasons)
  • Tenants looking for property
  • Buyers wanting to inspect your listings
  • Telephone enquiries
  • Administrative people needing help getting your marketing campaigns underway

So, all of this says that we need to set some solid rules that will not be broken or changed.   We must control our time as it is the main thing that we can control in commercial real estate agency.

Systems can set you free to get on with your business.  When business runs smoothly then you find the clients and the listings that you need.

Every system in commercial real estate is essentially made up of subsets or systems for key things.  Each part of the process can be refined and improved.  I have had systems for all of the following:

  1. Prospecting systems so I can keep focused on the right properties and clients that will need my services one day.  Every good commercial agent should have a pipeline of some type.
  2. Presentation processes so that every property that I pitch for is a deliberate pitch that is well controlled to a solid approach that I know works.   Confidence here is the key.
  3. Listing systems for each property type such as office, industrial, and retail property.  I would also have systems for sales, leasing, and property management.  Retail shopping centres are quite different and feature with their own systems that are unique to retail.
  4. Inspecting a property is quite special and having a process for that is wise.  A checklist to help you ask the right questions and look at the right things in the property will always be of benefit.  The inspection system should take into account the property type and the location; that is why you need checklists for this.
  5. Marketing processes for the listings that we work on should not be generic or ordinary.  The fact of the matter is that each property should be uniquely promoted to a plan; this assumes that it is an exclusive listing and you have vendor paid marketing funds paid in advance.
  6. Negotiations and communications with clients should be documented.  It is common that things will get delayed or changed when you are negotiating with a client on a sale or a lease.  When you have the supporting documentation and notes, nothing can go wrong.

If you are finding that things are out of control and you are struggling as an agent, take a look at your systems in commercial and retail real estate agency.  Build some processes and controls that help you move forward.

Commercial Real Estate Agent – Staff Evaluation and Employment Interview

In commercial real estate agency today, in any given year, you will be seeking new staff to employ and also evaluating their relevance to the agency.  To assist in the process, you should have an evaluation system that allows you to understand the candidate, and the value that they can bring to your agency.

For this reason you should create a checklist to be used in an employment interview.  It should also be said that you should have two or three interviews with the ‘short listed’ candidate to ensure that all of your observations are understood and confirmed.  In each meeting bring a further person from your existing staff into the interview so that they may give you extra comments and observations from the meeting.

Here are some evaluation processes and questions that can help your employment interview in commercial real estate today.

  1. Get detail from the candidate as to what they have done in the industry and where that occurred.  Check out the information they provide to you.  Ultimately you need to know that the candidate is suitably skilled and professional in their business activities.
  2. Talk to previous employers to understand the way in which the candidate operates at a professional and business level.  In most cases you should be talking to two separate employers.
  3. Get details of the successes that the person has achieved and can prove to you are relevant to your industry and location today.  The role of an agent or salesperson in commercial real estate today is quite complex.  They are required to undertake specific tasks related to prospecting, presenting and pitching, inspecting, qualifying, negotiating, and documentation.  Each facet of the job has specific disciplines.  Make sure that your candidate qualifies in all respects.
  4. Always talk to referees provided by the person.  Those referees should be unrelated and preferably from a business environment and workplace.  Get to the real truth of employment.
  5. If you don’t feel 100% regards a particular person in the interview, then there is something that is wrong and you simply need more time to understand what that is.  It is better to take time in your decision than to step into a new employment arrangement was someone that is not totally correct for the role.
  6. Today a salesperson or an agent in commercial real estate must bring considerable technology and computer skills to the task.  They must be prepared to undertake personal administrative work using computers and technology.  Ensure that the person is comfortable with this process and can prove to you that they understand computer usage and also software applications.
  7. Your sales team will be supported by administrative staff.  That administrative process and backup will differ based on how you want to run the agency.  It should be said that the administrative process and backup system will cost money and that cost recovery should occur from commissions and or a particular desk fee that applies to each agent and salesperson.

Here are some questions that you can put to the person under interview circumstances.

  • What is the most frustrating thing about commercial real estate today and how would you handle that?
  • How do you handle the paperwork part of the business and what systems do you use to support that?
  • What do you enjoy about the commercial real estate business today?
  • Why do you want to be employed in commercial real estate and most particularly in this agency?
  • What do you know about our business?  They should be able to show that they have researched your business prior to the interview.
  • How do you prospect for new business, and what are your processes and systems of support?
  • Tell me about the database and the customer base that you established in your previous place of employment.
  • What do you believe are your most relevant skills that you bring to this agency?
  • Tell me how you work within a team, and how you would improve the team and its interaction with you.
  • If you could describe yourself in two or three sentences, what would that be?
  • What are your most significant challenges as a professional salesperson?  How would you improve on these challenges to resolve them and build your future business?
  • Where do you see your career heading in commercial real estate today and over the next five years?
  • Why should I employ you?
  • What do you know about commercial real estate? Tell me more about that.

So these are very tough questions for some people to address.  That being said, commercial real estate is a tough industry and requires tough people that can handle difficult questions.  Formulate a questionnaire based on these questions and others that can help you fully qualify the candidate for employment in your agency.

Get more tips on employing Commercial Real Estate Agents in our Newsletter right here.

Every Little Bit Helps in Commercial Real Estate Marketing

In commercial real estate sales or leasing, every little bit helps when it comes to marketing the property to the target market and local area.  A correctly constructed marketing campaign should be 75% focused on the local area and 25% focused on the greater region and beyond.  Here are some tips on marketing from our Newsletter for agents.

In just about all property marketing efforts, we find that most enquiries will come from local business owners and local property investors.  This is the reason for the bias to local marketing.  Sure you may have some properties that are an exception to the rule but almost always it is the local enquiry that really matters

So all of this being said, the advertising effort for any property and listing should be comprehensive and across a number of marketing tools and systems.  The days of ‘generic’ advertising and promotion are well gone.

So let’s differentiate marketing between ‘open listings’ and ‘exclusive listings’.

  • In the ‘open listing’ situation you have no control on the property or the client.  For this reason advertising is largely a matter of convenience.  You put a sign on the property and an advert on the internet.  Any enquiries that you get you can process in an ordinary way.  Importantly you should not waste much of your time on any ‘open listing’.    If the client will not trust you with an ‘exclusive’ agency, then understand that your focus should be elsewhere on your better listings.
  • ‘Exclusive listings’ are better for the client and for you.  If the client is genuine in the sale or lease process, ‘exclusive’ listings allow you to get deeply into promoting the property to the local area.  The communication between you and the client is a lot stronger and more relevant to getting results from the marketing campaign.  Every ‘exclusive’ listing should include a reasonable amount of vendor paid marketing funds.

When you are to promote a property to the local area, a campaign should be structured on the target market, and personally driven by you as the agent or salesperson.  When you get too many listings, the ‘personal’ side of property promotion gets a lot more difficult.  The number of ‘exclusive’ listings that you can take on at any one time is about 15 listings.  Beyond that number, you need a personal assistant to help you with the required systems and processes.  Remember that the client wants to talk with you and not your assistant.

To put high value and relevance into your property promotion, take every listing personally into the area and the business community.  Use every listing as a reason to talk to business owners and property investors.  In this way you will get better results from all your marketing campaigns.

You can get more free tips like this in our Newsletter for Commercial Real Estate Agents.

No Brainer Top Marketing Tips in Commercial Real Estate Agency

In this commercial property market, you really do need to market yourself comprehensively and consistently to the clients and prospects that you deal with.  Your competitors will be doing everything possible to undermine your listings, attract your clients, and interfere with your leads and opportunities.  It’s a tough industry, but it is also very rewarding for those agents that can systemize their actions and keep up their focus.

What’s New?

There is nothing new here of course when I say that it’s a tough business world today; our industry is competitive.  Before everything else in commercial real estate, you must be a good marketer of your skills and services.  Every day you should be reaching into your database of contacts to consolidate your brand even further.

Here are some tips to help you consolidate your personal marketing plan as a top commercial real estate agent.

  1. From a marketing perspective, you will always get more leads and opportunities from quality listings.  This then says that most of your listing efforts should be directed towards properties of quality and desirability.  If you list low grade properties, you will attract low grade enquiry.  Get to know the right people with the best properties locally, and network them regularly.
  2. Each listing that you take on should be a controlled listing.  This means that your listings should be ‘exclusive’ by nature.  You should have control of those listings for a reasonable period of time.  Avoid open listings unless you really believe you can find the right person to take the property on.  Open listings are generally a waste of time given that you have no control over the stock.  In the open listing scenario, the clients are always listening to many agents at the same time and are therefore quite untrustworthy.
  3. Every quality controlled listing should be supported by a dedicated marketing program and vendor paid marketing funds.  This then goes back to the point and the importance of exclusive listings.  The equation is quite simple.  When you control the stock, you control the enquiry, and therefore you can close on more successful transactions.
  4. A successful sales or lease transaction should be communicated into the local business community and the surrounding property owners.  Any success that you have with a listed property is an excuse to spread the word of the positive result.  Be known as the local real estate agent of success and results.  Spread the message of your success locally.  Most of your leads and opportunities will come from the local property market exclusively.
  5. Every quality listing and exclusive listing should be personally marketed into the surrounding property owners and business community.  This means lifting the telephone to talk to the right people, and door knocking the streets surrounding the listed property.  Use every listing as an excuse to talk to more people.

In this property market today, there is an abundance of stock and a shortfall of qualified enquiries.  Some buyers and tenants cannot act in a market like this today.  For this very reason, every listing that you bring into your books should be optimized for maximum enquiry and market penetration.  Use that quality listing to get the message to the market.

You can get more tips like this in our Newsletter right here.

Commercial Real Estate Agents – Beware of Listing Panic

When it comes to your career in commercial real estate agency, you will sometimes feel the pressure of the market and the industry.  It is very easy to panic when you have no listings and or commission coming in.  Here are some tips from our Newsletter.

There is no point in panicking when it comes to your job and your market share.  If you feel the pressure of listings and commissions, it is simply a matter of developing a prospecting system and actioning it every day.  Over about three or four weeks, you will soon see the market turn more favorably back towards you.

One of the biggest problems in our industry is consistency on the part of the salesperson to build market share.  Each and every day top agents work towards consistency and systemized prospecting; you should do the same.

Success in our industry is largely created through ongoing personal contact with the correct people that matter in our industry.  Over time those relationships build listing opportunity and better market share.

If you feel some degree of panic when it comes to your market share, listings, and commissions, it is time to establish a system to take yourself forward and out of the difficulty.  Momentum and action taken immediately will help you lessen the frustration and panic you currently feel.

When you start moving towards a plan, and you stick to the process, you will soon see that the magnitude of the original problem was not as great as originally thought.  You are in control, and you can resolve any pressures that you currently have.  It is simply a matter of modifying your choices and habits.  Systemize your day; that is the secret to progress.

Here are some ideas to help you move forward with this and build a better market share over the next 12 months.

  1. It is extremely important that you control your time on a daily basis.  You are the only person that can do this.  There will be demands on you from business colleagues, clients, the agency principal, and others that can destabilize your focus on a daily basis.  Keep things simple.  Understand what you must do every day, and do it regardless of any pressure from others.  Take control of your time.  Set aside the time that is required to do the key things to take you forward.  Most particularly that will be prospecting and you should do that for approximately 2 or 3 hours per day.
  2. Start building relationships with the right people in your industry.  Have a look around the local area so you can make contact with business leaders, property owners, and property investors.  In the right market you can also add property developers to the list.
  3. It is a well-known fact that the degree, to which you believe you are in control, is the degree to which you will be successful.  Successful people are in control each and every day.  They make the right choices and take the right actions.  They will not waste time with the wrong people or wrong circumstances.

The commercial real estate industry is one of the most rewarding and challenging of sales careers.  You can meet some great people and earn a lot of money in the process.  All of that being said, you really do need to selectively choose your actions and your key tasks each and every day.  This is part of an ongoing personal marketing process.

You can get more tips like this in our Newsletter.

Marketing Tips and Systems for Commercial Real Estate Agents

In today’s property market, we have marketing systems to support our personal branding and our property listings.  These are two distinctly different challenges when it comes to marketing.  The properties will come and go from the market, however your personal brand needs to consolidate and grow.

So let’s look at some different aspects of marketing and the challenges to be handled.

When it comes to property marketing, you will be competing against other properties, the market trends, and other agents.  Through all of this, you need to attract the right level of enquiry and then qualify that enquiry for potential conversion.  Given that the property market currently is rather challenging, every marketing effort must be specific, direct, and effective. 

The ultimate goal of every marketing campaign should be to establish enquiry from the target market.  When you get enquiry, you can create inspections.  Over time the enquiry that you create will allow you to improve your database of qualified prospects; those qualified prospects can go into your database for regular ongoing contact.  That is exactly what top agents do and how they create better transactions from the market over time.

To correctly market a property today, you need sufficient funds and a dedicated marketing campaign.  Vendor paid marketing should be the rule and not the exception.  That being said, you should also ask for an exclusive listing to allow you to spend the necessary time in marketing the property for the clients that you serve.

The property market today requires real effort on the part of the agent.  That effort can only come through exclusive listings.  Those exclusive listings also allow us to build our market share and database of qualified prospects.

Here are some factors to incorporate into a property marketing plan:

  1. Determine the features relative to the subject listing.  Those features and improvements will dictate the target audience.  The advertising that you create should be directed at the target audience with a consistent message relative to the property.
  2. You will need to determine those three or four factors that create the interest relative to the property today.  Those three or four factors will need to feature in each and every advertising or media channel used.  Consistency is the key when it comes to property marketing.  Every advertisement should send the right message consistently, given that the same person may see the property in a number of different media channels.  Eventually the right message could very well encourage the person to lift the telephone and make an enquiry.
  3. Understand the differences between the different types of marketing today, and use the ones that are most successful for your property type and local area.  In most cases, newspaper advertising is becoming less relevant to the commercial property industry.  Direct marketing and internet marketing are taking over as the tools of choice when it comes to creating property enquiry.
  4. Research the keywords that are used on the search engines relative to your property location and property type.  Those keywords can be easily researched and then incorporated into your property advertising and marketing.  That will therefore allow each advertisement to be tuned to the requirements of property enquiry today.
  5. As part of the property marketing effort, use plenty of professionally taken photographs in the advertising and in the brochures.  You can always see when those professional photographs are used.  The placement of the property on the Internet will also be enhanced by quality professional photographs.  Most commercial salespeople and agents do not have the knowledge and experience to take photographs from the right angle or the time of day.  You only have one chance to market the property, and on that basis the photographs need to help you in every way possible.  The cost of getting the photography done is minimal when you consider the value of the property and the potential sale price or rental.

When it comes to marketing any commercial property today, create a plan relative to the client, the area, and the property.  Drive that plan in a way that encourages enquiry.  It is the enquiry that you want and that will help you with conversions.

Commercial Real Estate Agency Performance Standards that Matter

In commercial real estate today, every salesperson and every agent will require close monitoring when it comes to certain factors within their job.  Through this monitoring process, it is easy to identify if the agent or salesperson is lacking in some respect and requires knowledge or skills improvement.

It should be said that most salespeople require knowledge improvement and skills practice over time.  None of us are experts in everything.  Commercial real estate is a specialized part of the industry and even after many years of successful career activity, top agents should still be learning.

We all require skills improvement and regular practice.  That is why we should have regular sales team meetings and incorporate role playing into those team meetings.  In this way everybody can learn and practice from each other.

The property market is relatively difficult and challenging at the moment; many circumstances and problems will be experienced across the team.  Agents and salespeople can share these challenges as part of the team meeting, and then role play the solution or strategy to be used in resolving those common challenges.

Team meetings?

It should be said that many salespeople hate lengthy team meetings and role playing.  Those salespeople that have been in the industry a long time are likely to be those that offer the strongest resistance to personal improvement and change.  Through all of this, the top agents always know that practice is required and ongoing skills improvement will help their listing conversions and commission growth.

So you have a choice here; you can be one of the many that refuse to learn, or you can be one of the few that look to improve and grow their knowledge and their skills.  It is a simple choice and the answer should be logical.

Here are some performance standards that should be tracked by you as an individual, or if you are the sales team leader, the standards can be monitored across the team.  The standards will then show you if a particular person or perhaps even you personally will require some skills upgrade or knowledge improvement.  Don’t be afraid to learn, it is simply a factor of business.

  1. The number of signboards on properties in your local area.  This should be analyzed at the level of agency and salesperson.
  2. The numbers of properties advertised on the Internet per suburb, per salesperson, and per agency.
  3. The number of outbound calls made each day to new people
  4. The number of meetings created from cold calling and networking.
  5. The amount of new listings coming in each week
  6. The ratio between open listings and exclusive listings
  7. The amount of vendor paid advertising committed as part of the listing process.
  8. The numbers of inspections created per property and per salesperson on a weekly basis
  9. The size of the database for each particular salesperson
  10. The accuracy of the database and the volume of information maintained in that database
  11. The closing ratios to listings on a salesperson and property type basis.
  12. The amount of referral business converted from existing clients and closed transactions

You can quite likely add to this list based on your agency activity and agency structure.  When you track your numbers, you then know where skills can be improved but you also know where you are succeeding and growing.  These numbers will always assist you to stabilize your networking activities and therefore grow your market share.

The industry is not complicated; it just requires systemized processes and tracking.  When you do this, you will achieve more momentum and the personal success that you require will be easier to achieve.  You will know exactly where you are going and how you are proceeding.

Conditioning Commercial Real Estate Clients

Have you ever come across a commercial real estate client that thinks their property is worth more than what the market will deliver?  I would say just about 90% of clients fall into that category when first taking their property to the market.

It takes a while for reality to ‘kick in’ when it comes to property marketing.  Unfortunately the first few weeks of any property marketing effort are the weeks of getting results and enquiry; if the property is priced too high during that time, the client (and you) can be wasting a lot of time and money.

The important thing is that you help them understand what is really going on out there and what they can do to work within it.  It should also be said that you should not take the listing onto your books if the client will not listen to reason and the price is well away from market.  You do not want to be known as the agent that lists and cannot sell or lease.  Results are important in this industry.

Here are some facts:

  1. Property prices do not go up forever.  They will sometimes slow, stagnate, decline, or reverse.  The property market is based on a cycle of change and churn.  Our opportunity is in serving clients and helping them with that change.  As agents we need to know how to handle ‘change’ and help our clients do the same.  Do not struggle with the changes in the industry; work with them.  Know that they are a fact of the market and then design some solutions to help your clients through those changes when it comes to selling or leasing property today.
  2. New properties coming on the market will command more interest than older properties.  For that very reason you must watch the other property developments that are coming up.  Prices and rents offered will change the ‘game plan’ when it comes to existing properties today.
  3. Property enquiry will change during the year between the factors of property type, value, rent, time on market, and improvements.  Every listing should be matched into the prevailing market conditions.
  4. Selling and leasing commercial and retail property can be quite seasonal.  For this reason you can pick the best marketing solutions for the time of year.  Marketing of commercial and retail property today is quite important; the tools that we have available are diverse and powerful.  Choose the right tools to capture and grow the property enquiry.  Drop the generic marketing campaigns.  Be specific in how you promote your listings and make every marketing effort count.

So, all of this says that we should make sure at the very start of our services that we correctly guide and assist the clients that we work with.  When you list at the right price, your chances of better enquiry and eventual sale are much higher.  The client wants help in moving their property.  Tell them how you can help them do that and give solid proof as to the prevailing market conditions.  Give them the confidence and the reasons to use you as the preferred agent to take the listing on.

Commercial Property Presentations and Sales Pitch Strategies

The commercial property presentation today for sales and leasing has to be quite specific to the challenges in the property market.  Every client that we present to should be under no misunderstanding when it comes to the prevailing market conditions.  It is your job to tell them exactly how the market reacts at the moment to properties similar to that owned by the client.

The property sales pitch or presentation therefore needs to be comprehensive and specific to the property type.  When you do this correctly, you will achieve a listing that is matched to the market and a client that is receptive to the required ongoing marketing and negotiations.

Here are some tips to help your property presentation process today.

  1. As a first stage of the client connection, it’s desirable to meet the client on site and go through the property together.  This then allows you to ask questions of the client relating to the property history, the usage, and their motivations for sale or lease today.
  2. Following that property inspection, ask the client for at least 24 hours of time to allow you to research the prevailing market conditions, and provide the best recommendations to resolve their property challenge.  Use that time to correctly structure the strategies and recommendations that should be put to the client.  Be quite specific and not generic when it comes to those factors and your final proposal or recommendation.
  3. At the start of the actual presentation, explain to the client the prevailing market conditions as you see them relating to the property and it’s location.  Provide evidence from competing properties on the market today as to time on market, pricing, and best methods of sale or lease as the case may be.
  4. Over the last two years, there should be some market evidence relating to the achieved prices and rentals for that property type.  Whilst each property result will depend on improvements and location, it is worthwhile graphing the property market trends when it comes to results, prices, and rental.  Make sure you have inspected each comparable property so you can relate the facts to the client from a personal level.
  5. Be prepared to tell a few stories relating to other clients and market situations.  It is surprising how stories will gain the attention of the client and help your presentation overall.
  6. As part of the presentation, use plenty of digital photographs on your laptop computer.  Those photographs can be rolling automatically as a slide presentation whilst you talk to the client about their property.  Most of those photographs should be of the clients property, the surrounding locations, and competing properties.  In this way the client will be connecting with their property and your conversation.  Avoid slides with any words.  Pictures will help grab the clients attention.

Top agents today take deliberate effort when it comes to the property presentation and connecting with the client.  Everything needs to be specific in content and accuracy.  Expect the other competing agents to do their very best to derail your property presentation.  You will not have a second chance to meet with the client, so every presentation needs to be the best.

Points of Difference in Commercial Real Estate Services

In commercial real estate today, every service that you offer should have specific value related strategies.  It doesn’t really matter whether you sell, lease, or manage commercial real estate, but it does matter that you understand the valuable outcomes that you provide to the clients that you serve.

Every person in your agency should understand the values that are provided by your agency and business.  In this way every sales pitch and presentation can be improved and optimized.  Consistency in your message is really important.

To win a listing in today’s property market, your services are to be of the highest value and of great relevance to the client.  The generic approach in commercial real estate will give you poor results.  There is no point in being like every other agent.

Why are you the best agent in the local area?  It’s an interesting question.  When you know the answer, it will be very easy for you to pitch and sell your services in sales, leasing, or property management.  Top agents know how to do this and you should also understand the process.

When you look at the differences in service that can be provided, you can see specific values that are real and relevant to the clients that you act for today.  Here are some cases in point.

 

Commercial Real Estate Sales

  • The ability to tap into some comprehensive database that is real and up to date.  That database will help you minimise time on market and create property inspections conveniently and effectively.
  • The right methods of sale to attract the appropriate enquiry in today’s market.  The method of sale should be relevant to the property type and the levels of current property enquiry.  The ways in which you take a property to the market will send a message to the local property investors and business owners.
  • The marketing systems that can help spread the message into the target audience for the particular property.  Those marketing systems should be specific and not generic.  They should reach the target audience effectively and comprehensively over a well-directed marketing campaign.

 

Commercial Real Estate Leasing

  • A comprehensive list of all the business owners and business proprietors through the local area.  That list could be updated continually to ensure that you know when those businesses need to expand, contract, or relocate into other premises.
  • Tenant advocacy services that can help tenants to find the right properties in the right location.  Tenant advocacy is quite a specialised service and it requires the services of a highly experienced leasing professional.  They understand the lease strategies, rental types, and occupancy costs.  They know how to put good leases together and can serve their tenants well.  That being said, the tenant in such situation is the client.

 

Commercial Real Estate Property Management

  • Commercial property management is quite a specific service and should not be undertaken in your agency unless you have the right people.  A good property management service will include income control, expenditure management, risk management, property compliance, maintenance strategies, lease documentation, and tenancy mix management.  Make sure that you have at least one highly experienced commercial property manager on your team that knows what to do and how to do it.  They can then train other more junior people that come through the ranks.
  • Retail property management is distinctly different than commercial property management and to a large degree is more intense.  In retail property and with shopping centres, you will find that the intensity of management service is higher and therefore the fees are higher.  You need the right people that have experience in managing shopping centres with large numbers of tenants.  The fact of the matter is that a good retail property manager will help build your business due to the experience and relevance they apply to the properties that they manage.

So these are some points of difference that can be built on.  Specialisation in the industry will always give you leverage.  Make sure that your people provide the specialisation that your clients need and then send that message out into the market at every opportunity.

Commission Tips for Commercial Real Estate Sales Today

When it comes to your career in commercial real estate, commission will always be important to you as you move through the year.  In any given sales year, you really only have 10 months in which to create the necessary listing bank and completed transactions.

January is usually a difficult month when it comes to property enquiry and completed transactions.  Most clients and prospects take holidays in this period.  That being said, some agents will come back to the industry early after the Christmas break so they can find the right people that are active and looking for commercial property in that quiet time.  The strategy does work if you decide to adopt it.  They say that ‘the early bird catches the worm’, and in commercial real estate that rule does apply.

Commission structures change throughout the industry based on property type, industry standards, and industry regulation.  When the property market becomes more challenging and slow, there is a tendency for some agents to discount their fees and commissions.  The fact of the matter is that discounting fees is a precursor to agency downturn.  You are the expert when it comes to property enquiry and property marketing.  You do not need to discount your fees.  You do need to sell your services comprehensively.

Here are some observations regards commissions and fees structures:

  1. In many locations you will find that the commission base for a commercial property sale is usually around 3% for properties that will sell up to a price of around five million dollars.
  2. Over a sale price of five million dollars, the commission structure tends to reduce.  The lowest commissions I have seen in the industry were around 1.25 per cent of the sale price.  That is based on a property selling for $500,000,000.  It is quite unlikely that you will ever find commissions going below 1.25 per cent nor should they.  The fact of the matter is that a large and significant commercial property for sale requires significant effort when it comes to marketing.  The best people and the best strategies are required to achieve a great result for the client.  A totally committed agency team appointed to a significant listing will produce far better results for the client than any reduced commission benefit.
  3. All of this being said, if you are still going to reduce your commission for some reason, ensure that you get a commitment from the client for an exclusive listing to your agency for a long period of time.  That will usually be for a period of at least six months.   As part of that process, also get a commitment from the client to vendor paid marketing.  That vendor paid marketing should be paid to you upfront prior to the campaign commencing.

If the client expects you to reduce your commission, then you should expect the client to commit to your agency in a well-structured marketing campaign.  Show the client that you have the right strategies and people to promote the property comprehensively into the target market.  Tell the client what will be occurring over the marketing period.  Give them an established process that they can fully appreciate as part of accepting your listing appointment.  Use a Gantt chart to display your actions and intentions.

The marketing of commercial and retail property today is not an experiment.  It is a very specialised process requiring top salespeople and experienced agencies.  Develop your skills and sell them into your client base.  Show the client that you have the database and the connections to spread the property marketing message into the industry.  They must be able to see that your agency can get the best price in the shortest possible time.

Commercial Real Estate Agents – Property Sales and Leasing Strategies that Matter

The services we provide as the local commercial or retail real estate agency are quite specific and special.  The local property market will change throughout the year, as will the supply and demand for premises.  On that basis, we are the experts to help the clients that we serve.

Sales and leasing strategies for commercial and retail property will change throughout the year.  Each and every prospect should be entered into a database so that we can build on all future opportunity when the right property comes along.  Your diligence here will help your commission conversions and future listing opportunity.

Local property market information will come in many forms including prices, rentals, future developments, and the supply and demand for new space to occupy.  The clients that we serve cannot hope to cover those issues themselves.  That is where we step in as the experts and property strategists.

Top agents know how to package the negotiation for the best outcomes and results for the client.  These agents know what the market is doing, and how to package the right transaction for the clients that they serve.

Here are some tips to help you design your services for your local commercial and retail property clients.

  1. Local market information will vary throughout the year; you will see changing results in both sales and leasing activity.  This local market activity will be setting the necessary benchmarks and the market rentals or prices as the case may be.
  2. Local business sentiment, together with changes in the business community will have impact when it comes to property occupancy, sales, leasing, and rental returns.  It is our job to accumulate the necessary market knowledge and strategy to help the clients that we serve.  Optimising property occupancy and rental returns will help the eventual sales equation and resultant price.
  3. Rental strategy is quite specific to the location, the property type, and the intentions of the landlord.  In most cases, the rental should be set with the landlord prior to commencing any marketing effort relating to the particular property.  Standards and differences will apply when it comes to gross rental, net rental, incentives, rent reviews, and lease options.  We are the experts to help with these factors.
  4. Monitor the lease terms and conditions that apply to existing properties in the local area.  Business sentiment will have impact on existing negotiations and marketing strategies that you apply to each and every listing.  The supply and demand for local property will have immediate impact on the starting rental for any leases.  The same for pressures apply when it comes to the sale price.  On this basis, you need to know the differences between asking prices or rents, verses the facts and outcomes in finalised and completed transactions.
  5. Outgoings and operating costs will need to be recovered when it comes to lease occupancy.  The decisions you make here will have impact on the landlord and the rental structure of the lease document.  Local market standards, and the particular elements of the property may influence you when it comes to gross or net rental.  Importantly, the operating costs for the property should be recovered as part of the lease structure, so make the right decisions when it comes to rental type and outgoings recovery.
  6. Tenant mix strategy will shift and change throughout the year.  Tenancy mix decisions become important when you are working with a property containing multiple occupants in close proximity.  The duration of leases, and the proximity of those leases to other tenants need to be considered as part of each lease negotiation.
  7. The permitted use for each lease and tenant occupancy should be well considered and controlled.  Is quite important to ensure that the permitted use described in each lease that you negotiate is very specific and tight.  Too much latitude here  will allow the tenant to change the focus of the business and the offering to their customers.  This also has impact on any future lease assignment or subletting situation.  The permitted use will also have relevance to the tenancy mix strategy and any tenant retention plans that you implement.
  8. Vacancy and lease management should occur throughout the year.  Staying well ahead of any lease events and critical dates is quite important.  Prepare the landlord for any negotiations well in advance.  Have due regard for the local market conditions and the benchmarks established by other similar properties nearby.

It is easy to see why the services we provide as commercial real estate agents are regarded as specialised and unique.  That is why we charge a significant fee for service.  The clients that we serve can benefit significantly from the factors of our negotiation and finalised transactions.

Automate Your Tenant Retention Plan – Tips for Commercial Real Estate Leasing Agents

In commercial and retail property today, a tenant retention plan should be part of the services provided by specialist commercial leasing agents and property managers.  The retention plan can be a value-add service for the clients that we work for.

It is no secret that the commercial and retail property investment market is under some strain.  That is all due to the pressures on the local business community.  This will change and improve over time.  Up until then, we need to approach the property market with system and focus to help the clients that we work for.  The tenant retention plan is one way of doing that.

That’s presume you have a good property to work with and the client to assist when it comes to tenant retention.  Here are some tips to help you build the program and the system of retention.

  1. Review the property comprehensively to determine which tenants are more important to the future of the property.  Those high priority tenants should receive special treatment when it comes to lease renegotiation and occupancy.  The other tenants in the property may be retained although some form of priority needs to be determined.
  2. Review all the leases relative to all tenancies.  Those leases will contain critical dates and terms and conditions that will have impact on the property function and tenancy mix.  Ensure that those dates and factors are allowed for when it comes to tenant negotiation and tenant planning.
  3. Keep in close contact with all tenants within the building to ensure that any needs of expansion or contraction are fully understood.  If you do not do this, it is quite likely that the tenant will look elsewhere to other agencies for assistance and relocation.  Before long you will have a vacancy to deal with which could have been avoided?
  4. To formulate a good retention plan, you need a strategy of rental and lease documentation.  The rents for the property can be either gross or net and should be determined based on the trends of the local property industry and the age of the property.  The rents should assist the landlord to recover property operational costs (also known as outgoings).  Any rent reviews applied to the leases will be based on the rental type and lease term.  Strategy is everything with rental choices, so make sure you have the right information to help you with the correct rental choices.
  5. Lease incentives will vary throughout the year from property to property and with relevance to any new property developments coming up.  Incentives will potentially attract your tenants to move elsewhere.  For this very reason, your client, the property owner, needs to be quite flexible when it comes to the setting of lease incentives for existing sitting tenants.  Failure to provide an incentive to a sitting tenant may very well see them move elsewhere.  The cost of a vacancy in a property is significant and most inconvenient at most times.
  6. As part of the retention plan, review the local area with due regard for competing properties.  They will have an impact on your tenancy mix and also market rental.  Some of those competing properties will be influencing your tenants to move elsewhere.  Be careful and respectful of these competing properties.

So these are some tips and ideas that can apply to the tenant retention program.  As a specialized leasing agent, you can establish some real strategy here to help the landlord with their property momentum and property focus.  When the property market is slow or tough, the value of a retention program is high.  You simply need to structure your fee for service into the appropriate appointment to act.